[Verse 1] When a company needs money to grow and expand Three players enter with different plans Shareholders want the highest return they can get Managers play it safe, avoiding all debt Creditors just want their money back whole But these competing interests take their toll [Chorus] Agency costs are hiding in the fight Between the parties who don't see eye to eye Shareholders, managers, creditors too Each one's incentive makes the costs accrue Monitor and bond, that's the price we pay When interests clash in the corporate way [Verse 2] Managers might choose projects way too conservative When shareholders want risks that could be lucrative Or they might spend on perks and fancy office space While creditors worry about the debt they face These conflicts create costs that eat away At company value every single day [Chorus] Agency costs are hiding in the fight Between the parties who don't see eye to eye Shareholders, managers, creditors too Each one's incentive makes the costs accrue Monitor and bond, that's the price we pay When interests clash in the corporate way [Bridge] Monitoring costs keep watch on what they do Bonding costs align what they want with you Residual loss is what still slips on through These three costs shape how companies grew [Verse 3] When debt gets higher, conflicts multiply Shareholders might gamble, creditors ask why Asset substitution, underinvestment too These problems make the agency costs grew The optimal structure balances it all Tax benefits versus agency costs' call [Chorus] Agency costs are hiding in the fight Between the parties who don't see eye to eye Shareholders, managers, creditors too Each one's incentive makes the costs accrue Monitor and bond, that's the price we pay When interests clash in the corporate way [Outro] Finding the balance in capital structure's art Agency costs play the crucial part When you understand how interests collide You'll make better choices for the company's ride
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